13 Secrets Realtors Don’t Want You to Know
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Choosing the right real estate agent can transform your property search, turning the quest for a perfect home from daunting to delightful, whether you’re in the market to buy or rent. A skilled agent enhances your appeal as a buyer, advocates for you during negotiations, and introduces you to hidden gems you might have overlooked.
Acquiring knowledge of the ins and outs of this cutthroat field is a potent tool in the hunt for the ideal residence. Actually, a transaction may be made or lost based on what a customer chooses not to consider while researching their real estate agent.
A Home in Move-In Condition is Essential for a Sale
While purchasing and selling a fixer-upper may appear simple to those who watch TV, it can be challenging to sell one.
“It is crucial to have a house ready for occupancy. If your home needs repairs and you have the money to do them, it will improve its final selling price and shorten its time on the market. Some buyers will take on a home improvement project and consider a home that’s not in move-in condition, but beware: those buyers also tend to low-ball.
That Commission Fee May Be Negotiable.
Commission fees are often given to the buyer’s and seller’s agents whenever a house is sold. Usually, they come to 6%, with 3% going to each agency. Since that’s the industry norm and any vendor you’re working with could feel the same way, it might appear non-negotiable.
However, agents frequently engage in negotiations. For instance, they could be ready to take a percentage point off if the house you’re purchasing is costly. (After all, a 3% commission on a $1.5 million property is an incredible $45,000, and a 2% commission will still give them a nice $30,000.) Additionally, if an agent truly wants you as a client, they could be open to haggling over a lesser charge when you initially sign up with them.
Maybe You Shouldn’t Buy a Home – Or Sell Yours.
Agents aren’t keen to warn you that you should wait to purchase or sell a property right now since they get paid when you sell them your home or assist you in acquiring one. So, make sure you give that some serious thought of your own. For instance, it might not be worthwhile to purchase a property, incur high closing fees, and pay a large amount of mortgage interest if you plan to move out quickly when you could just rent.
Likewise, if your financial situation is a little precarious, you might want to avoid committing to required monthly mortgage payments, sometimes accompanied by numerous repair and maintenance charges. Meanwhile, you could not receive a fair price for your house if the present real estate market is heavily biased in favor of buyers and an excessive number of properties are available.
They May Have a Conflict of Interest
This is quite significant. Because you aren’t paying them, a real estate agent you work with to purchase a property might not provide you with the finest service. The seller is always responsible for paying the buyer’s and seller’s agents’ commissions.
Therefore, during the search and purchase process, your agent could consider the seller’s interests, and they might share some information about you with the seller’s agents.
You May Be Able to Buy or Sell a Home Without an Agent.
Those “For Sale by Owner” signs are nothing new; you might even want to put one in your yard. However, do your homework beforehand because doing it alone may require more effort from you, and you won’t have access to the advice of a knowledgeable real estate agent during the process. Professionals in the real estate industry with far more experience than you will also be your opponents.
Selling your home independently might result in higher net revenue from the sale, even if there might be costs involved with listing it in the multiple listing service (MLS); nevertheless, this is not guaranteed. Selling your house alone might also lead to some expensive mistakes, including presenting the house in a poor light.
A Real Estate Agent May Not Be as Good as You Think.
Not every real estate agent has the same level of expertise or experience. It’s good to take the time to interview any agents you may want to work with. Please find out about their background, number of properties sold, strengths, and duration of experience in the industry.
Ensure they know the specific area and neighborhood where you intend to purchase or sell a property. Inquire about references and check online reviews on real estate and other websites.
Your Agent May Not Want You to Buy a Lower-Priced House.
This presents an additional conflict of interest, and while it might not apply to all realtors—including yours—it might. Most agents get paid a portion of the house’s sale price. In light of that agreement, assuming everything else is equal, the agent would prefer that you purchase a $300,000 house instead of a $250,000 home, as the latter would result in a $9,000 payment instead of a $7,500 one at a 3% commission rate.
Your agent may legitimately point out that a more expensive property meets your needs better than a less expensive one, but keep in mind that the agent stands to gain financially if you purchase the more expensive home.
There May Be Fine Print on the Contract You Sign
Before you sign a contract with a representation firm, be sure you understand all the conditions. Find out how much commission they will receive, whether it is the usual 3% or something else entirely, and whether you will be responsible for any additional payments.
There may occasionally be a price mentioned that seems like an “administrative fee,” and you’ll need to find out why. After all, the typical commission usually includes administrative expenses. Any additional fees could be negotiable or at least less.
Some Agents Have a Home Inspector in Their Pockets.
If you are purchasing a house, your realtor could arrange for an inspector they know and trust to inspect your home. Although it’s convenient, you might instead find a reputable inspector alone.
Realtors who frequently work together may hesitate to uncover issues that could jeopardize the deal.
An Open House Might Serve Your Agent More Than You.
While knowing this is helpful, it won’t always be the case. Open houses are a common way to sell properties; potential buyers stop by and decide they would like to move in. Having other real estate agents view your property during open houses allows them to inquire about it with their customers if they think it would be a good fit.
It’s also important to remember that an open house may benefit your agent. When potential buyers visit the house, your agent can speak with them and obtain their contact information to become their real estate agent.
If You Sign up With a Big-Time Agent, You Might Not Get Their Full Attention.
If you notice an agent’s name on a number of homes for sale in the neighborhood and it appears that they represent a large number of customers, it would be natural for you to want to engage them to help you purchase or sell a home. After all, they could have a wealth of experience and information from their extended tenure in the industry, along with many valuable connections to other agencies and craftsmen.
Kitchens Don’t Always Sell Homes
Spending a lot of money on a kitchen makeover should not be done with the expectation that it would increase in value when you sell.
“People frequently believe that a $10,000 kitchen remodel should result in a $7,000–$10,000 increase in asking price. That’s not how it works, “Sure, the right buyer might pay $10,000 more for a kitchen renovation, but only if the renovations match their taste and style.”
Cash is King
Cash on hand is not a terrible idea if you want to guarantee that you acquire your ideal property, even if most purchasers often take out a mortgage.
“Even if you are extremely qualified, a bank will only lend the amount of money that the home is appraised for, so you wouldn’t be able to offer over asking price in most cases,” mentions Sandholm from Bestlifeonline.com. That frequently entails having extra cash in your bank account in competitive marketplaces. “If you are financing your purchase through a home loan, you can only pay over the asking price out-of-pocket.”
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